I have a bit of time and have re-read Sig's thoughts
on this subject and find, as usual, that he has a sound grasp of
reality. That the problem is political, in essence, is apparent because
no progress on the economic front will be made without some change in
the political atmosphere and here, the outlook has to be somewhat
pessimistic. The polarization, the rapidly widening gap between the
upper crust and the population, the massive mis-appropriation of the
nation's limited resources, the increasing monopolization of the mass
media, the general "dumbing down" of the discourse, the inability to
shake free of Israel, the ease with which the populace can be spooked
are all signs that things will carry on as previously.

In stating that George F Kennan's thesis that, early
post-war, the US had 5% of the world's population and 50 % of its
wealth and the objective should be to keep it that way is no longer
tenable is not in debate. The reality now is that the middle class is
shrinking. Its income has barely changed since 1970 while the GDP has
doubled. So we see a division of the national pie which rewards four
main segments: the military-industrial complex, the financial industry
which now sees 30% of corporate profits and has first rights to citizen
bail-out, big Pharma receiving massive taxpayer support via the Medicare
system, and the insurance industry which contributes nothing to health
care and skives off a huge commission. None of this is capitalism or the
free entrerprise system.

Looking at the military we see an annual cost of
around a trillion dollars. The Pentagon budget is regularily rubber
stamped through Congress in a few hours and the amount allocated is not
just increasing but the annual increment is also. So if we look on this
as an object with huge inertia going in a certain direction, it is in
fact accelerating in that direction. A change would demand a new force
to change the direction and magnitude. These kinds of forces do not
hatch either in an economy set in a certain mold for at least forty
years any more than they do so in the planetary world. If anyone has
doubts about what military spending ultimately ends up as I strongly
advise a Google search for Airplane Graveyards.

I do take a contrary view to Sig on the issue of the
US dragging us down. It is not happening now. I believe the TSE and the
Dow indices were about equal prior to the crash in 2008. Today the TSE
is about 1800 points ahead and our economies are not nearly
similar. With a quarter of all houses "underwater" the evidence could
not be stronger. The level of foreclosures is another measure. I also do
not see any massive terrorist event, even though any such event will be
played up as incipient doomsday, as having an impact of significance and
I really do not see a military conflict between the US and China in any
future scenario. We should recall that the US military is accutely aware
that it suffered its most devastating and humiliating defeat at the
hands of the Chinese army in Korea in the early 50's. We should also
note the preferred enemies of the past 50 years are not military
behemoths. Viet Nam, Cambodia, Laos, Panama. Lebanon, Iraq, Grenada,
Afghanistan, Somalia, Namibibia, Cuba, Nicaragua, El Salvador are all
targets of convenience and ego-building.

I usually subscribe to the views of Paul Krugman
and Dean Baker. Both prescribe more deficits or quantitave easing as the
only way to avert an even more serious national disaster. Yet neither
explains how one can borrow one's way out of an economic calamity when
one is already in debt up to one's eyebslls. Keynes- and I am not
knowledgeable on this- did not differentiate between deficits to spur a
flagging economy when the national debt was already astronomical and
when there was very little of it. It seems to me there should be a
difference. Anyone reading The Economist will have noted that
the US trade deficit is still in the $700 billion range and has been in
this territory for at least ten years. How is this masssive amount going
to be reconciled? Why are Greece, Ireland and Spain considered basket
cases when their significant debt figures are not markedly worse than
those of the US and the UK and they are members of an economic unit
which has been able to run a consistent trade surplus?

The US economy is showing positive growth now with
very massive infusions of debt. Does anyone dare to imagine what this
growth will be when the borrowing ends, as it ultimately must, if a
Weimar scenario is to be prevented?

Peter Kirkham: 07 Jan 11

I just received this material. It seems to be
very germane to Sig"s discourse. I am sure Sig would appreciate a copy. I
don't have his e-mail address.
But our other classmates may also appreciate a copy, if they have
an interest in this topic.

The Next Decade: Where We've Been... And Where
We're Going

By George Friedman

AUTHOR'S NOTE
This book is about the relation between empire, republic, and the
exercise of power in the next ten years. It is a more personal
book than The Next 100 Years because I am addressing my greatest
concern, which is that the power of the United States in the world
will undermine the republic. I am not someone who shuns power. I
understand that without power there can be no republic. But the
question I raise is how the United States should behave in the
world while exercising its power, and preserve the republic at the
same time.
I invite readers to consider two themes. The first is the concept
of the unintended empire. I argue that the United States has
become an empire not because it intended to, but because history
has worked out that way. The issue of whether the United States
should be an empire is meaningless. It is an empire.
The second theme, therefore, is about managing the empire, and for
me the most important question behind that is whether the republic
can survive. The United States was founded against British
imperialism. It is ironic, and in many ways appalling, that what
the founders gave us now faces this dilemma. There might have been
exits from this fate, but these exits were not likely. Nations
become what they are through the constraints of history, and
history has very little sentimentality when it comes to ideology
or preferences. We are what we are.
It is not clear to me whether the republic can withstand the
pressure of the empire, or whether America can survive a
mismanaged empire. Put differently, can the management of an
empire be made compatible with the requirements of a republic?
This is genuinely unclear to me. I know the United States will be
a powerful force in the world during this next decade—and for this
next century, for that matter—but I don’t know what sort of regime
it will have.
I passionately favor a republic. Justice may not be what history
cares about, but it is what I care about. I have spent a great
deal of time thinking about the relationship between empire and
republic, and the only conclusion I have reached is that if the
republic is to survive, the single institution that can save it is
the presidency. That is an odd thing to say, given that the
presidency is in many ways the most imperial of our institutions
(it is the single institution embodied by a single person). Yet at
the same time it is the most democratic, as the presidency is the
only office for which the people, as a whole, select a single,
powerful leader.
In order to understand this office I look at three presidents who
defined American greatness. The first is Abraham Lincoln, who
saved the republic. The second is Franklin Roosevelt, who gave the
United States the world’s oceans. The third is Ronald Reagan, who
undermined the Soviet Union and set the stage for empire. Each of
them was a profoundly moral man ... who was prepared to lie,
violate the law, and betray principle in order to achieve those
ends. They embodied the paradox of what I call the Machiavellian
presidency, an institution that, at its best, reconciles duplicity
and righteousness in order to redeem the promise of America. I do
not think being just is a simple thing, nor that power is simply
the embodiment of good intention. The theme of this book, applied
to the regions of the world, is that justice comes from power, and
power is only possible from a degree of ruthlessness most of us
can’t abide. The tragedy of political life is the conflict between
the limit of good intentions and the necessity of power. At times
this produces goodness. It did in the case of Lincoln, Roosevelt,
and Reagan, but there is no assurance of this in the future. It
requires greatness.
Geopolitics describes what happens to nations, but it says little
about the kinds of regimes nations will have. I am convinced that
unless we understand the nature of power, and master the art of
ruling, we may not be able to choose the direction of our regime.
Therefore, there is nothing contradictory in saying that the
United States will dominate the next century yet may still lose
the soul of its republic. I hope not, as I have children and now
grandchildren—and I am not convinced that empire is worth the
price of the republic. I am also certain that history does not
care what I, or others, think.
This book, therefore, will look at the issues, opportunities, and
inherent challenges of the next ten years. Surprise alliances will
be formed, unexpected tensions will develop, and economic tides
will rise and fall. Not surprisingly, how the United States
(particularly the American president) approaches these events will
guide the health, or deterioration, of the republic. An
interesting decade lies ahead.

INTRODUCTIONRebalancing America
A century is about events. A decade is about people. I wrote The
Next 100 Years to explore the impersonal forces that shape history
in the long run, but human beings don’t live in the long run. We
live in the much shorter span in which our lives are shaped not so
much by vast historical trends but by the specific decisions of
specific individuals.
This book is about the short run of the next ten years: the
specific realities to be faced, and the specific decisions to be
made, and the likely consequences of those decisions. Most people
think that the longer the time frame, the more unpredictable the
future. I take the opposite view. Individual actions are the
hardest thing to predict. In the course of a century, so many
individual decisions are made that no single one of them is ever
critical. Each decision is lost in the torrent of judgments that
make up a century. But in the shorter time frame of a decade,
individual decisions made by individual people, particularly those
with political power, can matter enormously. What I wrote in The
Next 100 Years is the frame for understanding this decade. But it
is only the frame.
Forecasting a century is the art of recognizing the impossible,
then eliminating from consideration all the events that, at least
logically, aren’t going to happen. The reason is, as Sherlock
Holmes put it, “When you have eliminated the impossible, whatever
remains, however improbable, must be the truth.”
It is always possible that a leader will do something unexpectedly
foolish or brilliant, which is why forecasting is best left to the
long run, the span over which individual decisions don’t carry so
much weight. But having forecast for the long run, you can reel
back your scenario and try to see how it plays out in, say, a
decade. What makes this time frame interesting is that it is
sufficiently long for the larger, impersonal forces to be at play
but short enough for the individual decisions of individual
leaders to skew outcomes that otherwise might seem inevitable. A
decade is the point at which history and statesmanship meet, and a
span in which policies still matter.
I am not normally someone who gets involved in policy debates—I’m
more interested in what will happen than in what I want to see
happen. But within the span of a decade, events that may not
matter in the long run may still affect us personally and deeply.
They also can have real meaning in defining which path we take
into the future. This book is therefore both a forecast and a
discussion of the policies that ought to be followed.
We begin with the United States for the same reason that a study
of 1910 would have to begin with Britain. Whatever the future
might hold, the global system today pivots around the United
States, just as Britain was the pivotal point in the years leading
up to World War I. In The Next 100 Years, I wrote about the
long-term power of the United States. In this book, I have to
write about American weaknesses, which, I think, are not problems
in the long run; time will take care of most of these. But because
you and I don’t live in the long run, for us these problems are
very real. Most are rooted in structural imbalances that require
solutions. Some are problems of leadership, because, as I said at
the outset, a decade is about people.
This discussion of problems and people is particularly urgent at
this moment. In the first decade after the United States became
the sole global power, the world was, compared to other eras,
relatively tranquil. In terms of genuine security issues for the
United States, Baghdad and the Balkans were nuisances, not
threats. The United States had no need for strategy in a world
that appeared to have accepted American leadership without
complaint. Ten years later, September 11 brought that illusion
crashing to the ground. The world was more dangerous than we
imagined, but the options seemed fewer as well. The United States,
did not craft a global strategy in response. Instead, it developed
a narrowly focused politico-military strategy designed to defeat
terrorism, almost to the exclusion of all else.
Now that decade is coming to an end as well, and the search is
under way for an exit from Iraq, from Afghanistan, and indeed from
the world that began when those hijacked airliners smashed into
buildings in New York and Washington. The impulse of the United
States is always to withdraw from the world, savoring the
pleasures of a secure homeland protected by the buffer of wide
oceans on either side. But the homeland is not secure, either from
terrorists or from the ambitions of nation-states that see the
United States as both dangerous and unpredictable.
Under both President Bush and President Obama, the United States
has lost sight of the long-term strategy that served it well for
most of the last century. Instead, recent presidents have gone off
on ad hoc adventures. They have set unattainable goals because
they have framed the issues incorrectly, as if they believed their
own rhetoric. As a result, the United States has overextended its
ability to project its power around the world, which has allowed
even minor players to be the tail that wags the dog.
The overriding necessity for American policy in the decade to come
is a return to the balanced, global strategy that the United
States learned from the example of ancient Rome and from the
Britain of a hundred years ago. These old-school imperialists
didn’t rule by main force. Instead, they maintained their
dominance by setting regional players against each other and
keeping these players in opposition to others who might also
instigate resistance. They maintained the balance of power, using
these opposing forces to cancel each other out while securing the
broader interests of the empire. They also kept their client
states bound together by economic interest and diplomacy, which is
not to say the routine courtesies between nations but the subtle
manipulation that causes neighbors and fellow clients to distrust
each other more than they distrust the imperial powers: direct
intervention relying on the empire’s own troops was a distant,
last resort.
Adhering to this strategy, the United States intervened in World
War I only when the standoff among European powers was failing,
and only when it appeared that the Germans, with Russia collapsing
in the east, might actually overwhelm the English and French in
the west. When the fighting stopped, the United States helped
forge a peace treaty that prevented France from dominating postwar
Europe.
During the early days of World War II, the United States
stayed out of direct engagement as long as it could, supporting
the British in their efforts to fend off the Germans in the west
while encouraging the Soviets to bleed the Germans in the east.
Afterward, the United States devised a balance-of-power strategy
to prevent the Soviet Union from dominating Western Europe, the
Middle East, and ultimately China. Throughout the long span from
the first appearance of the “Iron Curtain” to the end of the Cold
War, this U.S. strategy of distraction and manipulation was
rational, coherent, and effectively devious.
Following the collapse of the Soviet Union, however, the United
States shifted from a strategy focused on trying to contain major
powers to an unfocused attempt to contain potential regional
hegemons when their behavior offended American sensibilities. In
the period from 1991 to 2001, the United States invaded or
intervened in five countries— Kuwait, Somalia, Haiti, Bosnia, and
Yugoslavia, which was an extraordinary tempo of military
operations. At times, American strategy seemed to be driven by
humanitarian concerns, although the goal was not always clear. In
what sense, for example, was the 1994 invasion of Haiti in the
national interest?
But the United States had an enormous reservoir of power in the
1990s, which gave it ample room for maneuver, as well as room for
indulging its ideological whims. When you are overwhelmingly
dominant, you don’t have to operate with a surgeon’s precision.
Nor did the United States, when dealing with potential regional
hegemons, have to win, in the sense of defeating an enemy army and
occupying its homeland. From a military point of view, U.S.
incursions during the 1990s were spoiling attacks, the immediate
goal being to plunge an aspiring regional power into chaos,
forcing it to deal with regional and internal threats at a time
and place of American choosing rather than allowing it to develop
and confront the United States on the smaller nation’s own
schedule.
After September 11, 2001, a United States newly obsessed with
terrorism became even more disoriented, losing sight of its
long-term strategic principles altogether. As an alternative, it
created a new but unattainable strategic goal, which was the
elimination of the terrorist threat. The principal source of that
threat, al Qaeda, had given itself an unlikely but not
inconceivable objective, which was to re-create the Islamic
caliphate, the theocracy that was established by Muhammad in the
seventh century and that persisted in one form or another until
the fall of the Ottoman Empire at the end of World War I. Al
Qaeda’s strategy was to overthrow Muslim governments that it
regarded as insufficiently Islamic, which it sought to do by
fomenting popular uprisings in those countries. From al Qaeda’s
point of view, the reason that the Islamic masses remained
downtrodden was fear of their governments, which was in turn based
on a sense that the United States, their governments’ patron,
could not be challenged. To free the masses from their
intimidation, al Qaeda felt that it had to demonstrate that the
United States was not as powerful as it appeared—that it was in
fact vulnerable to even a small group of Muslims, provided that
those Muslims were prepared to die.
In response to al Qaeda’s assaults, the United States slammed into
the Islamic world—particularly in Afghanistan and Iraq. The goal
was to demonstrate U.S. capability and reach, but these efforts
were once again spoiling attacks. Their purpose was not to defeat
an army and occupy a territory but merely to disrupt al Qaeda and
create chaos in the Muslim world. But creating chaos is a
short-term tactic, not a long-term strategy. The United States
demonstrated that it is possible to destroy terrorist
organizations and mitigate terrorism, but it did not achieve the
goal that it had articulated, which was to eliminate the threat
altogether. Eliminating such a threat would require monitoring the
private activities of more than a billion people spread across the
globe. Even attempting such an effort would require overwhelming
resources. And given that succeeding in such an effort is
impossible, it is axiomatic that the United States would exhaust
itself and run out of resources in the process, as has happened.
Just because something like the elimination of terrorism is
desirable doesn’t mean that it is practical, or that the price to
be paid is rational.
Recovering from the depletions and distractions of this effort
will consume the United States over the next ten years. The first
step—returning to a policy of maintaining regional balances of
power—must begin in the main area of current U.S. military
engagement, a theater stretching from the Mediterranean to the
Hindu Kush. For most of the past half century there have been
three native balances of power here: the Arab-Israeli, the
Indo-Pakistani, and the Iranian-Iraqi. Owing largely to recent
U.S. policy, those balances are unstable or no longer exist. The
Israelis are no longer constrained by their neighbors and are now
trying to create a new reality on the ground. The Pakistanis have
been badly weakened by the war in Afghanistan, and they are no
longer an effective counterbalance to India. And, most important,
the Iraqi state has collapsed, leaving the Iranians as the most
powerful military force in the Persian Gulf area.
Restoring balance to that region, and then to U.S. policy more
generally, will require steps during the next decade that will be
seen as controversial, to say the least. As I argue in the
chapters that follow, the United States must quietly distance
itself from Israel. It must strengthen (or at least put an end to
weakening) Pakistan. And in the spirit of Roosevelt’s entente with
the USSR during World War II, as well as Nixon’s entente with
China in the 1970s, the United States will be required to make a
distasteful accommodation with Iran, regardless of whether it
attacks Iran’s nuclear facilities. These steps will demand a more
subtle exercise of power than we have seen on the part of recent
presidents. The nature of that subtlety is a second major theme of
the decade to come, and one that I will address further along.
While the Middle East is the starting point for America’s return
to balance, Eurasia as a whole will also require a rearrangement
of relationships. For generations, keeping the technological
sophistication of Europe separated from the natural resources and
manpower of Russia has been one of the key aims of American
foreign policy. In the early 1990s, when the United States stood
supreme and Moscow lost control over not only the former Soviet
Union but the Russian state as well, that goal was neglected.
Almost immediately after September 11, 2001, the unbalanced
commitment of U.S. forces to the Mediterranean-Himalayan theater
created a window of opportunity for the Russian security apparatus
to regain its influence. Under Putin, the Russians began to
reassert themselves even prior to the war with Georgia, and they
have accelerated the process of their reemergence since. Diverted
and tied down in Iraq and Afghanistan, the United States has been
unable to hold back Moscow’s return to influence, or even to make
credible threats that would inhibit Russian ambitions. As a
result, the United States now faces a significant regional power
with its own divergent agenda, which includes a play for influence
in Europe.
The danger of Russia’s reemergence and westward focus will become
more obvious as we examine the other player in this second region
of concern, the European Union. Once imagined as a supernation on
the order of the United States, the EU began to show its
structural weaknesses during the financial crisis of 2008, which
led to the follow-on crisis of southern European economies (Italy,
Spain, Portugal, and Greece). Once Germany, the EU’s greatest
economic engine, faced the prospect of underwriting the mistakes
and excesses of its EU partners, it began to reexamine its
priorities. The emerging conclusion is that potentially Germany
shared a greater community of interest with Russia than it did
with its European neighbors. However much Germany might benefit
from economic alliances in Europe, it remains dependent on Russia
for a large amount of its natural gas. Russia in turn needs
technology, which Germany has in abundance. Similarly, Germany
needs an infusion of manpower that isn’t going to create social
stresses by immigrating to Germany, and one obvious solution is to
establish German factories in Russia. Meanwhile, America’s request
for increased German help in Afghanistan and elsewhere has created
friction with the United States and aligned German interests most
closely with Russia.
All of which helps to explain why the United States’ return to
balance will require a significant effort over the next decade to
block an accommodation between Germany and Russia. As we will see,
the U.S. approach will include cultivating a new relationship with
Poland, the geographic monkey wrench that can be thrown into the
gears of a German-Russian entente.
China, of course, also demands attention. Even so, the current
preoccupation with Chinese expansion will diminish as that
country’s economic miracle comes of age. China’s economic
performance will slow to that of a more mature economy—and, we
might add, a more mature economy with over a billion people living
in abject poverty. The focus of U.S. efforts will shift to the
real power in northeast Asia: Japan, the third largest economy in
the world and the nation with the most significant navy in the
region.
As this brief overview already suggests, the next ten years will
be enormously complex, with many moving parts and many
unpredictable elements. The presidents in the decade to come will
have to reconcile American traditions and moral principles with
realities that most Americans find it more comfortable to avoid.
This will require the execution of demanding maneuvers, including
allying with enemies, while holding together a public that
believes—and wants to believe—that foreign policy and values
simply coincide. The president will have to pursue virtue as all
of our great presidents have done: with suitable duplicity.
But all the cleverness in the world can’t compensate for profound
weakness. The United States possesses what I call “deep power,”
and deep power must be first and foremost balanced power. This
means economic, military, and political power in appropriate and
mutually supporting amounts. It is deep in a second sense, which
is that it rests on a foundation of cultural and ethical norms
that define how that power is to be used and that provides a
framework for individual action. Europe, for example, has economic
power, but it is militarily weak and rests on a very shallow
foundation. There is little consensus in Europe politically,
particularly about the framework of obligations imposed on its
members.
Power that is both deeply rooted and well balanced is rare, and I
will try to show that in the next decade, the United States is
uniquely situated to consolidate and exercise both. More
important, it will have little choice in the matter. There is an
idea, both on the left and on the right, that the United States
has the option of withdrawing from the complexities of managing
global power. It’s the belief that if the United States ceased to
meddle in the affairs of the world, the world would no longer hate
and fear it, and Americans could enjoy their pleasures without
fear of attack. This belief is nostalgia for a time when the
United States pursued its own interests at home and left the world
to follow its own course.
There was indeed a time when Thomas Jefferson could warn against
entangling alliances, but this was not a time when the United
States annually produced 25 percent of the wealth of the world.
That output alone entangles it in the affairs of the world. What
the United States consumes and produces shapes lives of people
around the world. The economic policies pursued by the United
States shape the economic realities of the world. The U.S. Navy’s
control of the seas guarantees the United States economic access
to the world and gives it the potential power to deny that access
to other countries. Even if the United States wanted to shrink its
economy to a less intrusive size, it is not clear how that would
be done, let alone that Americans would pay the price when the
bill was presented.
But this does not mean that the United States is at ease with its
power. Things have moved too far too fast. That is why bringing
U.S. policy back into balance will also require bringing the
United States to terms with its actual place in the world. We have
already noted that the fall of the Soviet Union left the United
States without a rival for global dominance. What needs to be
faced squarely now is that whether we like it or not, and whether
it was intentional or not, the United States emerged from the Cold
War not only as the global hegemon but as a global empire.
The reality is that the American people have no desire for an
empire. This is not to say that they don’t want the benefits, both
economic and strategic. It simply means that they don’t want to
pay the price. Economically, Americans want the growth potential
of open markets but not the pains. Politically, they want to have
enormous influence but not the resentment of the world.
Militarily, they want to be protected from dangers but not to bear
the burdens of a long-term strategy.
Empires are rarely planned or premeditated, and those that have
been, such as Napoleon’s and Hitler’s, tend not to last. Those
that endure grow organically, and their imperial status often goes
unnoticed until it has become overwhelming. This was the case both
for Rome and for Britain, yet they succeeded because once they
achieved imperial status, they not only owned up to it, they
learned to manage it.
Unlike the Roman or British Empire, the American structure of
dominance is informal, but that makes it no less real. The United
States controls the oceans, and its economy accounts for more than
a quarter of everything produced in the world. If Americans adopt
the iPod or a new food fad, factories and farms in China and Latin
America reorganize to serve the new mandate. This is how the
European powers governed China in the nineteenth century—never
formally, but by shaping and exploiting it to the degree that the
distinction between formal and informal hardly mattered.
A fact that the American people have trouble assimilating is that
the size and power of the American empire is inherently disruptive
and intrusive, which means that the United States can rarely take
a step without threatening some nation or benefiting another.
While such power confers enormous economic advantages, it
naturally engenders hostility. The United States is a commercial
republic, which means that it lives on trade. Its tremendous
prosperity derives from its own assets and virtues, but it cannot
maintain this prosperity and be isolated from the world.
Therefore, if the United States intends to retain its size,
wealth, and power, the only option is to learn how to manage its
disruptive influence maturely.
Until the empire is recognized for what it is, it is difficult to
have a coherent public discussion of its usefulness, its
painfulness, and, above all, its inevitability. Unrivaled power is
dangerous enough, but unrivaled power that is oblivious is like a
rampaging elephant.
I will argue, then, that the next decade must be one in which the
United States moves from willful ignorance of reality to its
acceptance, however reluctant. With that acceptance will come the
beginning of a more sophisticated foreign policy. There will be no
proclamation of empire, only more effective management based on
the underlying truth of the situation.

Peter Kirkham: 06 Jan 11:

A couple of observations:

1. on balance, I think Sig’s comments are
eminently sensible.

2. as he states, or implies , there are short
run issues and longer term issues.

3. those projecting disaster, in my opinion,
are probably giving too much weight to the short term issues.

4.the short term difficulties, revolving
around debt, primarily sovereign, a growing income disparity, and a

non-functioning political system, need some
re-balancing. But all of this is doable, with varying prospects of
success.

As Sig states, it will be accompanied by short
run pain, more for some than others. But these issues will get resolved

to some degree. The biggest issue, in my
opinion, is a non-consensus in the political arena.

5. in the longer term the US still has a lot
going for it.

a. they do not have a declining population, as
do most industrial countries;

b. they have well defined property rights, in
the largest sense, including copyrights;

c. they have an entrepreneurial spirit within
the population.

d. their tax system is not confiscatory, in
terms of discouraging people to go for the

“American dream”, and take the inherent risks
involved in such endeavors.

e. leaving aside “happiness”, improving
incomes, in aggregate and per person, is contingent upon

only two things; productivity x population;
their population is NOT declining. Productivity is

dependent upon “investment” and the
willingness of the people to be “inventive and innovative”,

characteristics which I think the US has in
more abundance than any other nation I can think of.

f. non-US citizens still see their own dreams
as being often best realized within the US context.

6. when I add up all of the factors in para 5
above, it is difficult for me to see a “rival” to the US

in the medium term future.

7. I discount such things as environmental
change, since such elements take a very long time to

shift enough to radically alter the current
trends in any reasonable time frame.

8. Canada does have much of its prosperity,
and outlook, tied to the US. However, manufacturing is

now a much less critical element in our own
economy. Commodities will continue to dominate, as

will our human skill activities, like finance.
We also have some of the US positive conditions, such as private property

rights, a better functioning political system,
and less sovereign and other debt imbalances. Our “weak spot” is

a declining population, that can only be
offset by immigration. But to take this “offset road” means

the nature of our society, cultural and
otherwise, will change radically.

But in my opinion, all of the above is
manageable, although us older people might not like the implications

inherent in this change, as it relates to our
view of what Canada is, and should be.

I am currently on a Committee that is
constructing a "strategic economic plan" for the City of Kingston. I have
done

population projections for the City, out to
2030. (these are really interesting in their own right), One of the most
interesting aspects of thinking about these issues, is to what extent do
"nations" play a critical role in determining "outcomes", versus the
"local entity", or more generally,

a "corporate, business nexus". I am not sure
that the "nation" is necessarily the "determining entity" in
considering the "subjects that we are discussing above. We inadvertently
project out trends, which, in today's terms, gives the "nation" a dominant
role. At the very least, this "nation role" is now much diminished , and
in the future will be even more so.